Be more like Howard on IR, Henderson tells Abbott

Prime Minister
Tony Abbott
should take his cue from John Howard and tackle workplace reform at the “soft end" of union power – among small and medium businesses, author
Gerard Henderson
says.

Abbott “has never been an enthusiast for labour market reform", Henderson writes in The Return of the IR Club, a monograph commissioned by the Minerals Council of Australia, a lobby for resources companies. “The Abbott government is unlikely to disband the IR Club any time soon," Henderson says.

But he writes that the Prime Minister may be compelled to take up the cause “if unemployment and under-employment remain acute problems in some parts of Australia".

Henderson popularised the phrase “Industrial Relations Club" in the mid-1980s in an article in Quadrant magazine as a term of derision for the centralised wage-fixing system.

He argues in his latest work that the “Industrial Relations Club" is back in charge of the workplace. The analysis is likely to be rejected by the ACTU, one of the pillars of the IR club.

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Thanks to the re-regulation of the workplace under the former Rudd-Gillard Labor governments, workplace regulation is now more centralised than at any time in a quarter of a century, he says.

This has adverse consequences for competitiveness and the unemployed, who find it harder to obtain a job or extra hours, Henderson writes.

The defeat of the Howard government over Work Choices in 2007 persuaded the Abbott government not to pursue major changes to the system until after a Productivity Commission review of Labor’s Fair Work Act and the 2016 election.

The Prime Minister told a Business Council of Australia dinner last week business needed to be patient in its pursuit of reform. Henderson argues the Fair Work Act has contributed to deteriorating job market outcomes, despite the China boom cushioning Australia from the worst consequences of the financial crisis.

Unemployment has risen by nearly one-third, from just over 4 per cent at the end of the Howard government, to 5.7 per cent and is forecast to hit 6.25 per cent next year.

Youth unemployment has increased to 17.1 per cent in October, from 13.3 per cent five years earlier. About 950,000 Australians are “under-employed" – or would like more hours.

Henderson’s suspicion about Abbott’s zeal for workplace reform is shared by some business leaders.

Qantas chairman Leigh Clifford said on Thursday “we need to get on with" boosting workplace flexibility and performance. ANZ Banking Group chief executive Mike Smith said last week that Abbott should be out there “tilling the ground for the future".